Although the pandemic has caused widespread economic disruption and financial hardship, to the surprise of some experts this has not been accompanied by a rise in personal bankruptcy filings. On the contrary, the Wall Street Journal reports that Chapter 7 personal bankruptcies fell 22% in 2020. The likely explanation for this unexpected drop is simple: many Americans have lost their jobs, but stimulus payments, eviction moratoriums, and student loan suspensions have eased some of the financial pressures that often prompt people to seek out bankruptcy.
Still, the Journal reports that economists expect this sort of financial relief will be only temporary for many. Future stimulus payments are unlikely and eviction moratoriums do not prevent past-due rent from piling up. Were you considering bankruptcy but these pandemic-related policies have been keeping you afloat for the past months? If you worry that bills will start coming due again and think bankruptcy might again be the right choice, please give us a call or submit a free bankruptcy evaluation.